Scenarios that can Violate the Code of Ethics, Prompt a Lawsuit or even Disciplinary Action
Scenario 1: The Sellers anticipate that their listing will generate multiple offers. To be fair, the Seller instructs the listing agent to tell showing agents and prospects that the Seller will review all offers at the end of the weekend, on Sunday at 6:00 pm. On Saturday, the Seller receives an all cash offer $100,000 above the list price with no additional terms or contingencies, but the time limit for acceptance of the offer is Saturday night at 6:00 pm. The Seller wants to accept it asap.
Is the Seller obligated to wait until Sunday at 6:00? Would it be a violation of Article 3 of the Realtor Code of Ethics to accept the earlier offer? Article 3 of the Code of Ethics says “Realtors shall cooperate with other brokers except when cooperation is not in the client’s best interest…”
We haven’t seen any case law on this, but the general consensus is that the Seller can accept a contract at any time, even if the Seller has previously instructed the listing agent otherwise. Article 3 of the Code of Ethics does allow the exception of when cooperation is “not in the client’s best interests.” So long as the client is calling the shots and not the Realtor®, and there are no Fair Housing issues, the client’s wishes prevail.
To cover ourselves and avoid disappointed, angry selling agents and liability for license law and Code of Ethics violations, we should, as Listing Agents, include a statement in private remarks that “The Seller reserves the right to accept offers at any time.”
You list a property as “Coming Soon” with no showings available on the property until the commencement date.
The day before the marketing commencement date, a potential buyer without a cooperating agent reaches out to you wanting to see the house ASAP, because they are headed out of town that night. You’d love to earn both sides of the transaction, so you contact the prospect and let them see the property a day before the marketing commencement date. The early prospect’s offer is accepted.
You have just violated both the NAR Realtor Code of Ethics and the rules of FMLS. It’s Article 3 again, but in Scenario 2, it is read against the Listing Agent. Realtors are obligated under the Realtor Code of Ethics to cooperate with other brokers, unless it’s not in their client’s best interest.
By showing the home yourself a day before publicly stating when it would be available to see, you’ve misrepresented the availability of access to the property and violated the obligation to share information about the property and make it available to other brokers. You’ve also limited the period of marketing of the property, possibly shutting off other, better offers. There is also a truth in advertising component. State law, NAR Code of Ethics and Georgia License Law can all come into play.
1/27/2023 02:33:01 am
The house i am renting is for sale and has been on the market for 6 months. It seems no one wants to buy it. Since I have been living in it, I understand why, to a certain extent, but the seller is stumped. The last realtor that showed the house is someone I know personally, so I asked him why he thinks its not selling. Without missing a beat he informed me that he could tell the whole roof needs to be replaced, explained and pointed out why he knew. Also several "improvements" are far from being up to code.. there isn't a loan company that would finance it without work being done. The owners are foreign and don't speak any English so I communicate with their children. I let them know what he had said and sent them photos of the damage. They instructed me to get an inspection. So I scheduled 3. Before the first roofing company came to look at the roof, the realtor was sent out by the sellers to check things out. It was two women the same nationality as the sellers for better communication. They asked to see the damage and I pointed it out. Before I could finish my sentence one cut me off to tell me it was just paint peeling and I dont need to worry about it and to stay out of it. They began speaking in their native language together not a foot from me. I expressed how rude I felt that was. They laughed at me and told me that they were just having a private conversation. I told them they need to go somewhere private to do that then. They argued and told me I was being irrational. The realtor then took photos only of cobwebs and things she deemed the real reason the house wasn't selling... not one word about the work I have actually put into the property.. rude, but not the big picture here. She told me the seller doesn't want a roof inspection, but I already had it scheduled per their children..
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